Oh, What A Lovely Defecit!

[brendywendy]

its in one of the blog stickies on this board. tilehurst end maybe

[Svlad Cjelli]

can someone point me to the Whiff bit on finances on TTE, cant see it for looking, and know I read it once, want to get back up to spedd

It's spread across three articles : "How to make a small fortune from owning a football club." It's not The Whiff article, but references the same figures.

[Bucks Dave]

If you want to read the Whiff article, go to the Star website, scroll down to "Where's the money gone" and click. It's all there. I plan on doing another one next year but with additions. I did have one or two questions last time but without access to the club's accountants I decided to leave the unknowns out. Next time I plan to get access to the accountants.

[Hoop Blah]

I've not read the article but I'm assuming it wasn't written with access to the management accounts that Northern Git was talking about, just the financials that are out there in the annual report etc.

[handbags_harris]

http://star-reading.org/index.php/downl ... ew/165/74/

It's not clear:

I have copies of the last two years accounts, all on public record, with details of earlier years.The latest is hot off the press for up to 30 June 2010.

[Bandini]

It is clear, as the management accounts won't be public.

[Hoop Blah]

^^ What he said.

If it's the accounts in the public domain it's 99% certain to be those submitted as the annual (financial) accounts. I can't imagine any company, let alone RFC with all the competition and interest in football, are ever going to make their management accounts available to the public.

[BR2]

It would be interesting to know (but we never will ) how the salaries are split between players and all other employees.

[brendywendy]

99:1?

[Royal Rother]

It would be interesting to know (but we never will ) how the salaries are split between players and all other employees.

Not 100% sure but I have a feeling the wages costs are actually split between the various sectors of the business. As is the headcount.

(No-one should be surprised that neither SJM not any company in which he has an interest takes anything of any significance out.)

[Hoop Blah]

Not sure what you mean there RR.

For the football club all employees are lumped together and you don't see a count for the different departments within the club, eg Admin, Ticketing, Coaching, Playing, Sales, Marketing etc.

You can look at the hotels accounts and see how many are there compared to the football side, but I don't think that's what he's on about.

[brendywendy]

i think its safe to say that playing and coaching staff wages outweigh all other wages quite significantly

[Royal Rother]

Not sure what you mean there RR.

For the football club all employees are lumped together and you don't see a count for the different departments within the club, eg Admin, Ticketing, Coaching, Playing, Sales, Marketing etc.

You can look at the hotels accounts and see how many are there compared to the football side, but I don't think that's what he's on about.

Oh, I just had a feeling the disclosures within the accounts showed the split between football related staff and others... (it's been a while though!)

[Bucks Dave]

Yes it's the published accounts which is why I said that next time I would like to ask the accountants questions on areas that were not clear to me. Companies generally do not like to break down figures more than they need to by law and I would think Reading are no exception. However, there is a lot more detail in the Reading published accounts than other football clubs accounts I have seen.

[Pete10]

Spend some of the money .

[urz13]

i'm sure i've read something from the club that said we wouldn't be buying anyone this summer and we would be looking at a loanee defender. perhaps that's just the club being coy so others don't think we have money to throw away but i really wouldn't expect to see us spend much if anything at all this summer.

i see we're linked with anthony gardner, the former spurs and hull city centre back. free transfer, can cover left back as well. he and a loan defender and i think we look pretty strong going into the new campaign. that said, it's a different story if we lose shane long. replacing shane on our budget is almost impossible.

Do your shift keys work? If they fail, try Caps Lock.

[Man Friday]

...so, bottom line, no one can confirm for sure from sketchy accounts whether we have a black hole and, if so, the size of it and whether SJM is drawing money out of the club as its owner?

In other words, no one except SJM presumably, has a clue as to the financial position of the club?

[Wycombe Royal]

...so, bottom line, no one can confirm for sure from sketchy accounts whether we have a black hole and, if so, the size of it and whether SJM is drawing money out of the club as its owner?

In other words, no one except SJM presumably, has a clue as to the financial position of the club?

The cash flow statement is what you need to see as that will show how much money (cash) the club is actually generating or losing. The P&L and Balance Sheet don't show that.

However the balance sheet will show if Madejski is withdrawing any money from the club (and it shows he isn't).

[Royal Rother]

...so, bottom line, no one can confirm for sure from sketchy accounts whether we have a black hole and, if so, the size of it and whether SJM is drawing money out of the club as its owner?

In other words, no one except SJM presumably, has a clue as to the financial position of the club?

Pretty sure not serious up there...

Any monies paid to or received from any companies in which SJM has an interest would need to be declared in the company accounts so he cannot go shuffling money by way of consultancy fees etc.

And any off Balance Sheet commitments entered into where any degree of financial risk is at stake must also be declared so he cannot prop up another one of his companies by cross guarantees or the like without declaring it.

[Cypry]

...so, bottom line, no one can confirm for sure from sketchy accounts whether we have a black hole and, if so, the size of it and whether SJM is drawing money out of the club as its owner?

In other words, no one except SJM presumably, has a clue as to the financial position of the club?

There's nothing sketchy about them at all...did you read the Whiff article? Did it make sense? I'm no accountant, but even I can make sense of what they contain and understand "where the money's going"...

It's quite clear where the "black hole" is - all you have to do is look at the income vs outgoings figures, then take into account that the 2010 accounts where the last to include £11M extra income from the parachute payments.
In 2009/2010 we made an operating loss of £2M, which was turned into an operating profit of £2M with £4M of player sales...now take away the parachute payments, without those this would have been an operating loss of £13M and with player disposals £9M LOSS.

That's what we were trying to balance up last year, and in honesty, the club did bloody well to get the shortfall down to £4M from £13M prior to selling Gylfi. However, unless we've magically wiped out that £4M shortfall by reducing costs even further (salaries form just under 2/3 of the total outgoings) and increasing income, to the combined benefit of £4M to the club, then we still have a significant shortfall to make up....

What's more the accounts quite clearly show that SJM hasn't taken anything out of the club, not even the interest that he's perfectly entitled to under the terms of his loan.
I don't want to come across as arse licking SJM, it's simply a case that these are the facts; these accounts are legal documents, subject to approval by auditors and therefore can not in any way be "dodgy"....


I think what some are suggesting is that in some way access to the much more detailed Management Accounts (which show in detail what is paid to whom and which are almost never published by companies anyway), would enable them to find some way in which SJM is shipping money out "by the back door", perhaps from the clubs making payments to one of his other business interests. If SJM was so desperate for money then I have to ask why he would leave over £2M of his own money (the interest payments that he hasn't taken) in the club? Surely those would be the first funds that he'd take (those to which he's perfectly entitled)?

As it stands I'm pretty happy with the club as it stands - we're spending enough on players / wages to make us competitive (at least we've been there or thereabouts for the last few years - certainly not been boring being a Reading fan), but just about balancing the books without increasing debt.

I can understand that people fund it frustrating that we're not spending millions on players, when you see the way some are carrying on this year, but to be quite frank the approach by clubs such as Leicester represents everything that's bad about the game at the moment. Did anyone see Dispatches on Monday? There's an assumption that by pumping money into a club for players, then promotion is automatic. It's all very well, but what if promotion doesn't happen (and I hope to God that Leicester oxf*rd it up this year)? Then the club is left with debt, which accrues year on year, and in a few years, when the rich backers have had enough / run out of money, where does that leave the club?
I'd rather Reading stick with where we are at the moment, and strike a balance between paying enough for players to remain competitive (and before anyone says we won't compete this year, then that's what we heard a million times prior to last season, let's wait and see what magic McD can do), but also run the business in a way that doesn't accrue debt year on year, and assures the long term viability of the club....